USD starts the week with gains

USD starts the week with gains

Fundamentals

  • Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
  • As for the vaccine, European countries reported a delay in Pfizer’s vaccine deliveries. They are receiving significantly fewer doses of the Pfizer coronavirus vaccine than expected.
  • US Core retail sales came out much worse than the forecast. Sales dropped by 1.4%, while the estimate was only -0.1%. It marked the third decline in a row.
  • Unlike the US and EU, China encouraged investors with better-than-expected GDP and industrial output reports. Notably, China’s economy exceeded its pre-pandemic growth rates.

Technical tips

EUR/USD steeply plunged, but the support of the 50-day moving average in combination with the 61.8% Fibonacci level at 1.2070 stopped the pair. A short pullback to the upside is expected. If it finally manages to break this level, the way down to the key psychological mark of 1.2000 just above the 50.0% Fibo level will be open. Resistance levels are 1.2150 and 1.2200.

EURUSDDaily.png

GBP/USD is edging lower towards the one-week low at 1.3500. The pair shouldn’t break it on the first try. However, if it moves below this level, the doors towards the lower trendline and the 50-day moving average at 1.3420 will be open.

GBPUSDDaily.png

Gold takes a break after a steep decline and moves sideways in the $1 825-1 865 range. The 50-period moving average has already crossed the 100-period MA and now it is approaching the 200-period MA to make the second dead cross. Therefore, we can assume that gold will fall further to the next support of $1 800, once it breaks below the support of $1 825.

XAUUSDH4.png

Finally, let’s discuss the aussie. The risk-off sentiment pressed AUD/USD below 0.7700. The pair has already crossed two moving averages and isn’t likely to stop. If it drops below the low of January 4 at 0.7650, the way down to the psychological mark of 0.7600 will be clear. Resistance levels are 0.7740 and 0.7800.

AUDUSDH4.png

Follow the speech of Bank of England's Governor Bailey at 15:30 MT time.

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Similar

USD Holds the Line
USD Holds the Line

The US dollar index keeps rounding above the 103.60 historical support level. The buyers have already defended this level for three weeks, highlighting their interest in the greenback. Thus, buying USD looks less risky right now. 

US Dollar Prepares for the Pump
US Dollar Prepares for the Pump

On the H4 timeframe, the US dollar index has formed a bullish falling wedge. At the beginning of the trading session, the price is testing the upper border of this wedge. Thus, in case of a higher-than-expected Core PCE Price Index m/m, the US dollar will skyrocket against other currencies. 

Uptrend in Gold Starts Now
Uptrend in Gold Starts Now

Happy Wednesday, traders! We went through the Internet and found the best news for you, take a look!

Latest news

Market Crash Incoming?
Market Crash Incoming?

This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.

What Currency Will Overperform?
What Currency Will Overperform?

S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.

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